The proposed research aims to study the impacts of the AIDS epidemic on the American labor market. Theoretical models that are appropriate for analyzing the labor market impacts of AIDS will be developed, with emphasis placed on accounting for key features of the epidemiology of the disease, the implications of the epidemic for the structure of firms; labor costs, and the relevant legal environment regarding employment discrimination. These models generally imply diminished labor market prospects for individuals who have characteristics that indicate that they are relatively likely to become ill because of AIDS. Readily available data will be used to test a wide range of empirical implications of the theoretical models and to measure the magnitude and extent of the epidemic's impact on wages, labor force participation, unemployment, hours worked, firm size, health insurance coverage, human capital investment, and migration flows. Remarkable features of the epidemic relating to its sudden and unanticipated beginning and its concentration among certain narrowly defined subgroups of the population will be fully exploited in the empirical analyses performed.